Adelaide Desalination Plant

The Hon. J.S. LEE (14:42): I seek leave to make a brief explanation before asking the Minister for Water and the River Murray a question about the Desalination Plant.

Leave granted.

The Hon. J.S. LEE: The Senate inquiry has revealed that the state government has failed to honour a promise to reduce water pumped from the River Murray. Utility figures show that Adelaide's take from the Murray increased to 73 billion litres last year, up from 43 billion litres. This over-usage now puts South Australia in breach of its agreement to win $228 million in federal funding for the desalination plant.

The Hon. I.K. Hunter: What rubbish.

The PRESIDENT: Order! Let the honourable member ask the question and then you will be able to answer.

Members interjecting:

The PRESIDENT: Order! The Hon. Ms Lee has the floor.

The Hon. J.S. LEE: Thank you for your protection, Mr President. The state government confirmed that the $228 million federal funding agreement meant that there would be no future increases in how much water was drawn from the Murray by South Australia, and the minister said that the state would not increase its entitlement to take water. The Desal Plant, which cost $2.2 billion and significantly increased customers' water bills, was designed to produce 100 billion litres of water for Adelaide and stop the city's reliance on the River Murray. However, it has been reported that the Desal Plant is operating at only minimum capacity in order to avoid maintenance and restart costs. My questions are:

1. Will the minister confirm that the state government has breached its agreement to win the $228 million in federal funding?

2. Has the minister contacted the federal government to determine what action it will take against South Australia for breaching the agreement?

3. When can we expect South Australian Desal Plant to be fully operational an honour the promise to reduce South Australia's reliance on the River Murray?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (14:44): What incredible garbage from the opposition. No wonder the woman was preselected last on the Liberal Party ticket recently. Is she repeating the remarks of Senator Bob Day?

The Hon. J.S.L. Dawkins interjecting:

The Hon. I.K. HUNTER: Well, fourth.

The Hon. J.S.L. DAWKINS: Point of order.

The Hon. I.K. Hunter interjecting:

The PRESIDENT: Minister, show a little respect for members asking questions. Just answer the question.

Members interjecting:

The Hon. I.K. HUNTER: How can you show respect for such stupidity, Mr President? Goodness gracious!

Members interjecting:

The PRESIDENT: Order! The minister has the floor.

The Hon. I.K. HUNTER: We have an honourable member in this place who forgets that she is here representing the people of South Australia, peddling the mistruths that Senator Bob Day is peddling around the federal parliament, standing up for the irrigators in New South Wales and Victoria and selling down the river the irrigators of South Australia. We had the Liberal Party do that here—

The Hon. R.L. BROKENSHIRE: On a point of order, I understand that we have to actually put the truth on the record in this house. That is not true and I ask the minister to withdraw it.

The PRESIDENT: That is not a point of order, comrade. Sit down.

The Hon. I.K. HUNTER: Family First is embarrassed by their federal senator—

The Hon. D.W. RIDGWAY: On a point of order, sir, did you call the Hon. Robert Brokenshire 'comrade'?

The PRESIDENT: The honourable comrade. Sit down.

The Hon. D.W. Ridgway: So, you've a new style of presidency, calling people comrades?

The PRESIDENT: You should be the last one to be making any comment about anyone's behaviour. You have put us through some outrageous behaviour this afternoon. Minister, answer the question.

The Hon. I.K. HUNTER: I should hope that we would all conduct ourselves in a comradely fashion in this place. We are all comrades in the same service to the people of South Australia, yet you hear such rubbish from honourable members opposite about South Australia's interests, selling out South Australian irrigators to the interests of the Eastern States. Once again, we have the honourable member coming in here, peddling mistruths that she is getting from a Senate enquiry, headed up by Senator Leyonhjelm and Senator Day. Senator Day is supposedly representing our state, but again all he is doing is championing the interests of people in Victoria and New South Wales.

The Hon. R.L. Brokenshire: Wait until you see the report.

The Hon. I.K. HUNTER: Well, the Hon. Mr Brokenshire reminds me that I should wait to see the report. He is quite correct: I shouldn't prejudge the outcome, even though I am hearing on the wireless several times when Senator Bob Day is in town doing interviews that he is actually taking the part of the Eastern States. Again, it falls to the Labor Party in this state to stand up for South Australians wherever they may live in the state—and that is exactly what we will do.

In terms of the desal plant, let me just I advise the honourable member on a few facts—it might help her. The Adelaide desal plant is a key component of this government's investment in water infrastructure, which has guaranteed our water security to 2050, something the Liberal Party could never do. It is an important insurance policy against future drought. There is part of the answer for the honourable member to one of her final questions: it is an important insurance policy against future drought. That is why it's not pumping out at full capacity right now. Because why? It costs more.

The honourable member over there, Ms Jing Lee, would want us to increase the cost to SA Water consumers. If I take the inference rightly from her question, that's what she wants to do: she wants to drive up the cost to SA Water customers. That's not what we do. We balance the water that's in the system, in our reservoirs, in the river, and, yes, with the Desal Plant, to get the most cost-efficient outcome for SA Water customers.

The Liberals opposite want something different. They want us to turn on the Desal Plant at 100 per cent and drive up those costs, charging SA Water consumers even more. We won't stand for that. It is an important insurance policy that we have there in case we need it and, of course, all the projections, particularly about future global warming, are telling us that we will need it into the future.

The Adelaide Desal Plant has been operating, I am advised, since October 2011, and since that time has produced a total of 130-odd gigalitres of water as of February of this year. The Adelaide Desal Plant successfully completed, I am advised, the operational proving period (also called the warranty and defects correction period) in December 2014. The plant is currently being operated in minimum production mode, contributing 30 megalitres per day for nine months of the year, approximately eight gigalitres of water, I am told, per year. Incorporated in this mode of operation is an approximate three-month period of maintenance, which I am told is usually scheduled when the demand for water is low, which is probably winter.

As part of its submission to ESCOSA for the next regulatory period from 1 July 2016 to 30 June 2020, SA Water included a proposal to continue operating the ADP in minimum production mode. Operating an appliance at minimum capacity as opposed to placing it in standby mode maximises the useful life of the plant and the investment SA Water customers have made in its construction.

In addition to minimising the cost of operating the plant across its life, operating the plant at minimum capacity provides greater flexibility in operating the plant at greater capacity and benefits the wider network in reducing the need for capital investment. In ESCOSA's draft regulatory determination—I have to remind the chamber that it is only a draft at this stage—which was released on 10 February 2016, the operation of the ADP was considered as part of SA Water's overall optimised water supply portfolio.

The draft provides for the operation of the plant over the coming four years in minimum production mode and this draft position does not require SA Water to run the plant at that or any other capacity I am advised. It simply acknowledges that it is prudent and efficient given the available evidence to make a revenue allowance that would permit the inclusion of water sourced from the ADP within an optimised water supply portfolio—that is ESCOSA in the draft determination.

SA Water is working with the ADP operator, AdelaideAqua Pty Ltd, at both the contractual and operating level to look at reprofiling the daily flow arrangement to achieve the desired maintenance and plant availability outcomes at a reduced cost to the business and therefore to SA Water customers. It is important that we realise that this plant is there operating in this mode to give us the best and the cheapest outcome for our consumers.

I remind the honourable member about the amount that I said the plant has produced—130-odd gigalitres as of February 2016. That is 130 gigalitres that does not have to come out of our other water resources, for example, reservoirs or the Murray. Of course, as we know, at the moment reservoir levels are rather low. The honourable member even fails at the first hurdle. She does not acknowledge that the Adelaide Desal Plant has produced 130-odd gigalitres as at February which has not come out of the river system—a saving to the river system.

The other thing she has not acknowledged either is that, under the agreement with the federal government, we have an allocation, a five-year average allocation. I cannot remember the exact amounts right now but we are nowhere near even two-thirds of that. We have not even approached the limits of the allocation that is allowed to us under that national agreement. So where does the honourable member then stand on this false allegation which she has picked up goodness knows where—maybe listening to the Hon. Mr Brokenshire on the wireless. I would advise her against that as it will lead to perdition in one way or another.

I say to the honourable member: let me give you the facts and then you can go and think about your questions in the future. Don't rely on the Hon. Mr Brokenshire or Senator Bob Day to give you those facts because you will be severely misled.

The Hon. R.L. Brokenshire: You can rely on me more than you can rely on the minister.

The Hon. I.K. HUNTER: I doubt that.